Gamification is an emerging technique of using gaming techniques to better engage software users

Thanks to computers and the Internet, everyone is playing games these days.

Teenagers rack up hour after hour on "World of Warcraft," as their parents grow crops on Zynga's "Farmville." All in all, about 83% of the people living in the U.S. play a video game at least once during the year, according to a 2009 National Gamers Survey.

At first glance, all this game playing may not seem relevant to the enterprise. Deeper inspection, however, reveals that the mechanisms that guide and score online game playing can be used for much more than the keeping tabs on virtual farms.

In fact, the large social networks are already using people's love of gaming to keep users returning. Foursquare has amassed 20 million users who enjoy checking in at various locations, winning coupons and recognition for doing so. Social networks know that, when embedded in software or services, gaming techniques can help motivate users, keep customers loyal, and provide a wealth of data that can be used to analyze and improve operations.

Games have distinct characteristics. They have set goals for their players, as well as rules that specify how to reach these goals. And, perhaps most importantly, they have feedback systems to let the players know how well they doing. Gamification is the process of applying these game-like feedback systems to online, social or work activities.

With gamification, "you are awarding the behavior you want to see people doing," said Tom Richardson, a managing partner at Deloitte.

Most businesses have been constructed to run as efficiently as possible. But what too many organizations leave out is a way to engage with either their customers or with their employees. Gamification addresses this shortcoming by using techniques from online games to motivate and guide people in business environments, said Michael Hugos, author of the book "Enterprise Games: Using Game Mechanics to Build a Better Business," published by O'Reilly Media.

At first glance, a manager may not see the point of adding game controls to enterprise software that is already being used by employees. The employees are paid to use the software, after all.

But money is not the only motivator for people. Think of how interesting a football match would be if no one kept score, nor kept any statistics on the players or teams. Gamification can make a routine business process more enjoyable for both customers and employees, thereby making it more them more likely to interact with your organization.

"People like to play games. That is the way we humans are wired up," Hugos said.

Game-like elements in an enterprise application can take several forms. Levels, or progress bars, allow players to collect points by completing a series of individual tasks. Users can earn badges for completing tasks. An organization can set up a leaderboard, or even facilitate direct interaction between two users, to engender competition in a game of some sort. Or, an organization could award some form of virtual currency, which could be redeemed for gifts, or even real currency.

"The contest and motivation [are] the key components," said Jason Lander, founder and CEO of Hively, which offers a gamification online service for collecting customer feedback. Hively's services simplify customer feedback with a set of easy-to-click smiley or not-so-smiley faces. The service then collects metrics compiled from the user feedback, which can be used by management to help improve customer service.

Also keep in mind that gamification produces a wealth of data that can be analyzed to strengthen organizational operations. It can pinpoint what the hot topics are, either within an organization or with a customer base. It can also help the organization refine operations. "It is essentially daily feedback that helps us analyze and refine what we offer," Richardson said.

PaaS (platform as a service) provider Engine Yard is one company that is using gamification. "We wanted to increase engagement, which we measure by how long people stay on our website, how often they come back, and how much they do," said Engine Yard vice president of operations Bill Platt.

Engine Yard contracted with Badgeville, a Menlo Park California startup formed in 2010. For Engine Yard, Badgeville keeps track of user visits and behavior as well as the linkage between different actions. "Through that behavior tracking, you begin to understand what locks up the valuables in your content, and also what people wish they found," Platt said.

Engine Yard started to implement a badging system in January, and the system was operational by April. To set up this recognition system, Engine Yard worked with Badgeville to produce a gaming-like environment for using and contributing to Engine yard's set of documentation.

"Setting up the badge system was surprisingly easy," Platt said. They had to decide what kinds of actions for which their users should be awarded. For instance, answering questions could result in a badge, as could filing bugs. The badges "climb up in value based on how much work you put in and how much value the community finds in what you did," Platt said.

From April to June, the company saw its website engagement -- as measured by the number of interactions and the quality of interactions -- increase by 40%. Internal surveys found that customer satisfaction had also grown by 2% in the time period, from 96 to 98%.

"We're getting much better user generated content and the folks in our community are getting public recognition for participating," Platt said. "And we're getting better intelligence as to what really drives engagement."

Another example of gamification is a monthly online contest by Playboy magazine, called Miss Social. With this service, young women can submit photos to compete in a monthly contest to be a Playboy model. Visitors of the site can then vote on their favorite female. The idea is that each female contestant will have many young male friends they can urge to visit the site and vote for them. "That's the demographic Playboy wants to tap into," Hugos said.

Wiseling, a recently launched New York online marketplace for gently worn fashionable clothing, has been dabbling in various game dynamics to build its online user base.

"As a new online company, we have a huge reliance on social media to spread the word, so we're always thinking of ways we can increase engagement on those platforms," said Wiseling CEO Chelsey Bingham. The company has already run several contests on its blog that involve sharing photos on Twitter and Facebook. It is also considering the idea of adding merit badges for the number and quality of sales. "We hope the status rewards entice members to stay involved and strengthen the sense of community," Bingham said.

What are some facts to keep in mind when gamifying a system?

Perhaps the most important element is the story-boarding, essential for detailing which actions should merit awards for users. As if you were creating a movie, you think up a story-line for users to follow. Create missions, or pathways. "You are not thinking about technology, but what experience you want to make," Engine Yard's Platt said.

Another group of people to get involved are the line managers, Richardson said. These are the people who best know how either customers or employees interact with the organization's systems -- and they best know what might motivate these people. Almost as importantly, the managers would know how any contest could be gamed, i.e. people using unscrupulous shortcuts for competitive advantage.

"You often get one crack at this. If you mess it up royally the first time, people will be very skeptical about it the second time," Richardson said. "Even though gaming is in the name, it is not a game."